Cognitive memory and habit formation are two qualitatively different learning processes based on separate neural systems, a cortico-limbic and a cortico-striatal system, respectively. These two systems are developmentally dissociable. Whereas habit formation is present in 3-month-old monkeys, cognitive memory does not reach adult levels until 2 yrs of age. To examine the possibility that immaturity of one or more of the neural stations in the pathway for cognitive memory is responsible for the late development of this function, we examined the effects of early damage to either the limbic structures, known to be critical for the formation of new memories, or of area TE, which may be critical for the long-term storage of visual memories. Assessment of the effects of these neonatal lesions on the early development of visual recognition ability points to greater compensatory potential after neonatal cortical than after neonatal limbic removals, suggesting that cortical association areas of the cortex are immature at birth and possess greater plasticity than limbic structures. Anatomical studies have revealed transient connections from visual association area TEO, and many of these connections are maintained as a result of neonatal removal of area TE. In addition, behavior/lesion studies indicate that during infancy, visual recognition functions are widely distributed throughout many visual association areas but that, with maturation, the functions become localised to area TE. As a result of early damage to area TE, however, visual recognition processes remain widely distributed throughout the visual association areas, all of which, consequently, contribute to the resultant sparing of visual recognition ability. Further evidence indicating that cortical association areas are immature at birth and may possess greater plasticity than limbic structures comes from our studies on the development of rule learning ability in infant monkeys. Whereas the inferior prefrontal cortex is critical for this function in adult monkeys, it is not critical in infants. In contrast, limbic structures do appear to be critical for the development of rule learning ability in infant monkeys.